4.52pm: This week's loss is the biggest since May as markets fret that the US economy could contract again if no deal is reached in Washington to avoid the "fiscal cliff".

"We're just seeing a continuation of lingering concerns about the 'fiscal cliff' and perhaps a deal not getting done in time," says Tim Waterer, a senior trader at CMC Markets.

"Whilst selling pressures have abated somewhat today compared to earlier in the week, there is still very much a tendency for traders to get into defensive assets."

4.42pm: The market has fallen six out of the last seven sessions and posted a loss of 2.8 per cent for the week.

4.30pm: Among the sectors, financials fell 0.7 per cent, materials lost 0.3 per cent but consumer discretionary added 0.5 per cent. Industrials also gained, adding 0.6 per cent.

4.11pm: The sharemarket has closed slightly lower in a quiet session. The benchmark S&P/ASX200 slipped 12.4 points, or 0.3 per cent, to 4336.8, while the broader All Ords lost 10.5 points, or 0.2 per cent, to 4360.1.

3.59pm: The federal government will do everything it can to support sacked Ford workers, federal Treasurer Wayne Swan says.

Mr Swan told reporters in Melbourne his thoughts went out to workers affected by Ford’s decision to axe 212 jobs at its two Victorian plants.

The workers at the Broadmeadows and Geelong plants found out their fate on Friday, after the company received a $103 million assistance package, including $34 million from the federal government.

3.41pm: ANZ chief executive Mike Smith’s annual pay has grown to $10.1 million on the back of larger cash bonuses.

Mr Smith’s base salary of $3.15 million in the year to September 30 was unchanged from the previous year, but short-term cash incentives rose to $1.9 million, from $1.75 million in the previous year.

ANZ’s annual report shows Mr Smith was paid $5.2 million in cash, and received $4.95 million worth of shares, taking his total remuneration up four per cent from the previous year’s $9.7 million.

Mr Smith is likely to be the highest-paid bank chief executive in the 2011/12 fiscal year.

BusinessDay reported this week that Westpac chief executive Gail Kelly was paid $9.6 million in the 12 months to September 30, - a $200,000 pay cut on the year before.

Commonwealth Bank chief executive Ian Narev was paid $5.7 million in the year to June 30.

The details of National Australia Bank chief executive Cameron Clyne’s pay will be released on Monday.

3.30pm: Australia Post’s credit rating has been downgraded, and is unlikely to increase again as fewer letters are posted every year and it has more competitors for parcel and express deliveries, writes BuisnessDay's Lucy Battersby.

Its rating was downgraded from AA+ to AA with a stable outlook.

This rating is higher than Australia’s banks and largest companies because S&P builds into its calculations an assumption that the federal government, which owns Australia Post, would step in to help repay debt if needed. However, S&P expects the new lower rating to stay:

Upward ratings momentum is considered unlikely given the company’s exposure to structurally eroding mail volumes, strong competitive pressures in the parcel and express delivery businesses, and some execution risks associated with the group’s investment program over the next few years.

Meanwhile, the United States mail service has hit its $US15 billion borrowing limit for the first time in history. It lost $US15.9 billion in year ending Sept. 30, tripling its $5.1 billion loss last year.

3.05pm: More on the dollar which, according to ANZ foreign exchange strategist Andrew Salter, is overvalued by as much as 10 US cents.

‘‘I actually think the fair value of the Aussie dollar is somewhere between 90 and 95 US cents, based on commodity prices and interest rate differentials,’’ he said. It's trading at about $US1.0334 today.

Mr Salter says one thing inflating the value of the currency is demand from international central banks.

‘‘They want to get rid of their US dollars, they want to get rid of their yen, their euro and their pounds and they want to invest it in other markets,’’ he said.

And he warns the current cycle could last many more years, possibly even decades and while it continues it is likely to keep the Aussie dollar higher.

‘‘We see it lasting for a long period of time.’’

2.56pm: Japan has banned the import of poultry and eggs from Australia after an outbreak of bird flu at an egg farm in NSW.

The Department of Primary Industries said all chickens at the property in Maitland, 160 km north of Sydney, will be destroyed after the H7 virus was detected last week.

Japan imported 0.9 tonnes of chicken meat in 2011 and 1.9 tonnes in the two years before. Imports of eggs totaled 2.1 tonnes in the three years through last year. Japan is asking Australian authorities to provide more details about the outbreak.

2.52pm: It's Friday afternoon, so a good time for a recap of the week's main events.

2.45pm: The dollar's stuck in a bit of a rut today. Commonwealth Bank currency strategist Joseph Capurso says the dollar is moving within a tight range and the only thing that could shift it would be some clear evidence that the US fiscal cliff would be tackled comprehensively:

There’s not a lot of trading going on at the moment. It’s not likely to move much higher. There’s not much market data on the horizon. The only big thing in the near-term is President Obama’s meeting with US congressional leaders in order to avoid the fiscal cliff. I think if they don’t come out with something concrete, I think we’ll see a big rush into US Treasuries. That would cause the Aussie dollar to fall.

2.30pm: More on corporate investment group Mariner’s $19.7 million scrip takeover bid for struggling surfwear group Globe.

Shares in the two companies have taken two divergent paths since this morning’s announcement, with Globe rising 6.4 per cent to 41.5 cents and Mariner falling 7.9 per cent to 35 cents.

2.20pm: A little follow-up on the Nikkei - despite today's jump it's still playing catch-up with other major indices:

The Nikkei is up 6.4 per cent so far this year but lags a 7.1 per cent rise in the S&P/ASX200, a 7.6 per cent rise in the US S&P 500 and an 8.6 per cent gain in the pan-European STOXX Europe 600.

2.13pm: While most of the region's sharemarkets are trading flat to lower, Japan's Nikkei index has jumped nearly 2 per cent to its highest level in more than a week, after the leader of Japan's main opposition party, seen as likely to become premier after an election next month, called for more monetary policy easing.

The call by Shinzo Abe, a former prime minister, for the central bank to push interest rates to zero or below zero to spur lending has pushed the yen to a 6-1/2 month low, sending shares in exporters sharply higher.

Exporters had been battered by worries about the US fiscal cliff and Europe's debt crisis and several jumped more than 5 per cent including Canon, Nikon and Nissan Motor.

"We see a little bit of our flows picking up today," says Mattia Ciancaleoni, director of equity sales at Citigroup.

Here's a surprise: amid all the headlines about the demise of Australian manufacturing at the hands of our strong currency, militant unions, interfering governments, poor productivity and the solar eclipse, employment in the manufacturing sector actually grew in the year to the end of August.

What's more, productivity also has been improving and is now running at a bit above the average of recent years – admittedly faint praise. It still adds up to the standard liturgy chanted by the high priests of business being as dangerously outdated as the Catholic Church's celibacy and men-only rules.

1.39pm: Here's how the rest of the region is doing:

Japan (Nikkei): +1.8%

Hong Kong: +0.1%

Shanghai: -0.6%

Taiwan: -0.2%

Korea: -0.1%

Singapore: -0.2%

New Zealand: flat

1.30pm: The ASX200 is still down about 0.2 per cent, on track to post its sixth loss in seven sessions and nearly 3 per cent down for the week.

1.25pm: The IMF has also ranked the nation’s banking sector as one of the most concentrated in the world, saying this dominance is one reason the banks are much more profitable than their global peers.

In a review of the financial system published today, the fund judged the sector to be ‘‘sound, resilient, and well managed.’’

However, it also said there was room for improvement in how the nation shielded itself against future global financial shocks, which are most likely to affect the economy via the banking system.

In particular, it said the Commonwealth Bank, Westpac, ANZ and NAB were ‘‘systemically important’’ – meaning their health or otherwise has a major impact on the economy.

‘‘Significant and protracted difficulties in any one of them would have severe repercussions for the entire financial system and, in turn, the real economy,’’ the fund said.

12.59pm: More still from Asia, but this time we're in Hong Kong, where stocks have opened 0.45 per cent higher, rebounding slightly after suffering a heavy loss in the previous session.

The benchmark Hang Seng Index gained 94.89 points to 21,203.82 in the first minutes of trade.

12.50pm: Staying with Asia and in Tokyo Japanese MPs have passed a crucial deficit-financing bond bill that will allow the Govvernment to pay for a huge chunk of this year’s public spending, avoiding the country’s own ‘‘fiscal cliff’’.

The bill was a key condition for Prime Minister Yoshihiko Noda calling elections, now set for December 16, after he warned large parts of Japanese public life would grind to a halt unless the bill won parliamentary approval.

12.39pm: Gloomy news out of Singapore, where the Goverment says economic growth will be at the lower end of its forecast with demand for exports weighing on expansion.

The economy will grow 1 per cent to 3 per cent in 2013 after expanding about 1.5 per cent this year, the Trade Ministry said.

It had previously forecast growth of as much as 2.5 per cent in 2012. GDP contracted 5.9 per cent last quarter from the previous three months, worse than the 1.5 per cent decline estimated earlier.

“Potholes remain,” said Edward Lee, a Singapore-based economist at Standard Chartered. “We may not see improvement until the second half. The equation is skewed toward the external front and that remains the overriding factor.”

12.36pm: Here's some more on how the markets have performed today, from CMC Markets chief market strategist Michael McCarthy, who says that although the Australian market was lower, its performance so far today was not bad:

One of the factors might be the strong performance yesterday [of the market] in Japan. Japan is still an important trading partner for Australia Other than that, it’s very hard to point to positives for this market. US markets weren’t down hard, but they were down; Europe was down; and commodities fell overnight as well.

Mr McCarthy said today's local fall may not be as bad as was expected because the market had already fallen significantly over the week.

12.30pm: Lunch looming and there's still not much in the way of direction - just more bouncing around. In recent trade the All Ordinaries index is 8.3 points lower, or 0.2 per cent, to 4362.3, while the benchmark S&P/ASX200 is 7.7 points lower, or 0.2 per cent, to 4341.5.

"We were expecting the market to be a bit weaker today because just sentiment in general is pretty poor," said Cameron Peacock, market analyst at IG Markets.

"We've had a terrible last week and a half."

12.22pm: Fortescue shares are down six cents - 1.5 per cent - at $3.90 today.

FMG chairman Andrew Forrest told the ABC this morning that his High Court challenge against the federal government’s mining tax was about conquering evil. Taking an aphorism that's been used in the past for arguably highter causes, Mr Forrest said that all it took for evil to win was for good people to do nothing, he said.

‘‘We’ve decided not to do nothing,’’ he said. Fortescue is challenging the legality of the minerals resource rent tax (MRRT), levied against iron ore and coal miners’ super profits. The 30 per cent tax took effect from July 1.

12.05pm: Apple's Australian operation has been hit with a $28.5 million bill for back taxes, statements lodged with the corporate regulator in April show, write BusinessDay's Georgia Wilkins and Ben Butler.

News of the Tax Office bill comes as European governments put global technology companies under intense pressure over their complex ownership structures that rely heavily on a network of tax havens.

Apple’s Australian arm reaped $4.9 billion in revenue last year through the sale of its computers, iPads and iPhones.

The bill takes its total tax tab for the year to $94.7 million.

12.02pm: The dollar is hanging around close to a three-week low with risk appetite on the wane after stocks declined globally overnight.

The International Monetary Fund statement yesterday that there is scope for the Reserve Bank of Australia to ease further put the dollar on course for a weekly drop.

“The pressure is still on the downside for the Aussie,” said Lee Wai Tuck, currency strategist at Forecast in Singapore.

“There are concerns about the global economy slowing and euro zone risks. The RBA is likely to open the door for more easing, if not in December, maybe next year in February.”

Mr Lee said he expects the Australian currency to drop to parity with the US dollar by January.

In recent trade the Australia’s dollar was little changed at $US1.0334. It touched $US1.0307 yesterday, the lowest since October 26. The currency is heading for a 0.5 per cent decline against the greenback this week, the biggest fall since early October.

11.45am: Tokyo stocks have opened 0.78 per cent higher with sentiment buoyed by the weaker yen amid hopes for aggressive monetary easing by the Bank of Japan.

The Nikkei 225 index at the Tokyo Stock Exchange was up 68.61 points at 8,898.33.

Traders say that favourable currency market movements would offset overnight drops on European and US markets, as well as weak forecasts from US retailers, and news that the eurozone had fallen into recession.

11.40am: BusinessDays’ Paddy Manning has been looking at Whitehaven’s decision to sack staff and scale back its Brisbane office as weak coal markets continue to bite.

Whitehaven shares have touched record lows on the news, sinking 3.5c or 1.2 per cent to $2.755.

One sharemarket analyst speaking off the record said Whitehaven had flagged cost reductions and the cuts to centralised, head-office functions like business development were typical in the wake of a merger.

‘‘It’s nothing big, ten people,’’ the analyst said. ‘‘When you join two companies you can strip out corporate costs. We had already modelled in a couple million dollars of cost savings.’’

11.35am: Shares in Kathmandu have leapt, after the outdoor goods retailer announced that first quarter sales had gone up 19.5 per cent on a year ago despite difficult trading conditions.

Kathmandu shares have climbed 7.4 per cent to $1.45 this morning.

Sales for the 15 weeks to November 11 were $NZ66.9 million ($A52.5 million) with same store sales 14 per cent higher.

"Our sales performance in the first 15 weeks of the financial year has overall been ahead of our expectations, particularly in Australia," chief executive Peter Halkett said in a statement.

"Growth in first half-year profit remains highly dependent on the Christmas and January trading period."

11.20am: Corporate investment group Mariner has made a $19.7 million scrip takeover bid for struggling surfwear group Globe only two days after the surfwear group received a second strike against its remuneration report, which spilt the board.

Mariner told the Australian Securities Exchange this morning that it had made the offer to the Globe board, offering 47.5 cents for each Globe share, totalling $19.7 million for the company’s 41.463 million shares.

However, the offer is not a cash bid. Mariner will offer five fully paid Mariner shares for every four fully paid Globe ordinary shares. Based on the closing prices of Mariner and Globe shares yesterday, Mariner said its offer represented a 21.8 per cent premium to the Globe closing price of 39 cents on November 15.

Globe shares were unchanged at 39 cents this morning, Mariner is also unchanged, at 38 cents.

11.15am: Whitehaven Coal has responded to falling coal prices by announcing that it will scale back its presence in Brisbane and sack 10 workers.

Among those losing their jobs is Whitehaven's executive general manager of business development Peter Kane.

‘‘Whitehaven is not immune to the continued decline in global coal prices and like all coal companies we are having to make difficult decisions," managing director Tony Haggarty said.

"As global coal prices improve we will continually revisit the status of our development plans."

Whitehaven shares are down 1.1 per cent at $2.76.

11.10am: The long-running soap opera that is Glencore's $31 billion bid for control of Xstrata has never looked so certain of reaching a conclusion as it does now, after the sovereign wealth fund of Qatar threw its support behind the biggest takeover of the year.

Qatar Holding, Xstrata's second-largest shareholder, says it will back Glencore's offer of 3.05 of its shares for each of Xstrata's.

Shares of Xstrata climbed to 959.7 pence in London overnight, 2.95 times the closing price of Glencore. The ratio was the highest on record, an indication investors expect the transaction to be completed.

The deal now has a greater chance to succeed as Qatar is pivotal in the voting process, accorrding to Alain William, an analyst at Societe Generale.

11.02am: Investors are appearing cautious due to negative leads out of Europe and the US.

According to IG Markets market strategist Stan Shamu, investors are waiting for an announcement out of the US to provide more certainty about tackling its budget deficit issues, including the pending fiscal cliff.

"European economic data is also showing signs of weakness and everyone is a bit scared Europe might be slipping back into recession,’’ he said, adding that there was a focus on Greece rather than creating growth on the continent.

10.57am: The International Monetary Fund has given a stamp of approval to Australia’s economic policies, commending the Reserve Bank’s easy monetary stance and saying there was room to ease further if needed.

Treasurer Wayne Swan said the IMF had given the Australian economy a ‘‘big tick’’. He went on:

The IMF projects a solid economic outlook for the Australian economy in the face of ongoing global headwinds. The government understands that not everyone is doing it easy, but reports like these demonstrate why all Australians can be proud of what we have achieved working together in the face of acute global challenges.

10.52am: If you've ever wondered what it takes to be brilliant, blogger James Adonis will answer all of your questions here.

10.42am: It's a mixed picture for the market heavyweights, the banks and miners, so far this morning.

Among the big banks

CBA is 0.56% lower to $58.36

ANZ is 0.50% lower to $23.93

NAB is 0.73% higher to $23.40

Westpac is 0.57% lower to $24.50

Macquarie Bank is 0.69% higher to $30.03

Among the big miners

BHP is 0.15% higher to $33.17

Rio is 0.39% higher to $57.04

Fortescue is 0.13% lower to $3.955

10.36am: Among the early sliders on the ASX200 today are:

Saracen: -3.57%

Silver Lake: -3.38%

SP Ausnet: -3.33%

Coalspur Mines: -3.21%

Mirabela Nickel: -2.67%

Lynas: -2.48%

10.30am: Among the best-performing stocks on the ASX200 this morning are:

Buru Energy: +5.17%

APN News & Media: +3.33%

Macquarie Atlas: +2.33%

Aristocrat Leisure: +2.30%

Ten Network: +1.79%%

Fairfax Media: +1.73%

10.25am: It's the same picture with the ASX200 sectors in positive territory this morning - there's a few of them, but none are up much:

Utilities: +0.47%

Health: +0.45%

Industrials: +0.24%

Consumer Discretionaries: +0.17%

10.20am: A few sectors on the ASX200 are down this morning and, in a very flat market, only a bit:

Finance: -0.41%

Materials: -0.10%

10.13am: In early trade, the All Ordinaries index is 3.9 points lower, or 0.1 per cent, to 4366.7, while the benchmark S&P/ASX200 is 4.1 points lower, or 0.1 per cent, to 4345.1.

10.10am: The markets have opened flat.

10.07am: And talking of iron ore ... Some analysts are expecting shares to steady today, after a pretty poor week, mainly because of the spot iron ore price.

Prices are hovering at their highest in nearly four months, supported by firming steel demand in China that some traders say could sustain a recovery in iron ore through the early part of next year.

10.02am: Mining billionaire Andrew Forrest has defended attempts by his company, Fortescue Metals Group, to defer more than $200 million in royalty payments to the Western Australian Government, saying the failed attempt was based on "sound logic".

In comments that amount to the first time Fortescue has admitted seeking to avoid the payment, Mr Forrest said the deferral was designed to ensure the restart of expansion works at the Kings iron ore project went ahead.

Mr Forrest said the deferral had been designed to ensure the expansion could continue if iron ore prices stayed around $US90 a tonne but had become redundant when it recovered to $US120 a tonne, where it still rests today.

9.58am: There’s bad news for the big banks this morning with research showing none of the four heavyweights rank in the top 10 when it comes to Australia’s preferred financial services provider.

Commonwealth Bank, Westpac, National Australia Bank and ANZ are all outranked by their smaller rivals, according to data compiled by consumer feedback website ProductReview.com.au.

ING Direct is number one, followed by Heritage Bank, a customer-owned business, and ME Bank, which was established by super funds and unions.Other top-10 banks include Bendigo Bank, Bank of Cyprus and Macquarie Bank.

All four of the big banks received an average rating of 2.6 out of 5.0 on the ProductReview website, leaving them well down the list.

9.53am: The 17-nation eurozone economy is back in recession - its second since 2009.

"The data confirmed that, despite continued growth in Germany and France, the eurozone as a whole is now officially in recession. We expect the recession to deepen markedly in the coming quarters," Capital Economics analysts said.

The news sent Europe's big markets backwards, with the DAX 30 in Frankfurt closing down 0.82 per cent to 7043.42 points, while in Paris the CAC 40 fell 0.52 per cent to 3382.40 points.

In London, the FTSE 100 index of leading companies dropped 0.77 per cent to 5677.75 points, hit also by worse-than-expected British retail sales.

9.50am: Recent analyst rating changes:

QBE cut to 'negative' by A.M. Best

Cochlear cut to 'underperform' at Credit Suisse

Iluka cut to 'underperform' at Macquarie

Iress cut to 'neutral' from 'buy' at Goldman Sachs

CSR upgraded to 'neutral' from 'buy' at Goldman Sachs

Seven West Media raised to 'buy at Duetsche Bank

9.47am: BP has agreed to pay a record $4.36 billion in fines for the 2010 Gulf of Mexico oil spill and will plead guilty to obstruction and criminal negligence in the deaths of 11 workers.

The company’s reputation was ravaged after an April 20, 2010 explosion on the BP-leased Deepwater Horizon rig killed 11 workers and unleashed the biggest marine oil spill in the industry’s history.

The massive criminal fine - which will be paid over six years - will be relatively easy for BP to absorb. It has a market value of $US127 billion and last month hiked its shareholder dividend after posting a bumper third quarter profit of $US5.43 billion.

Group chairman Carl-Henric Svanberg said the ‘‘resolution is in the best interest of BP and its shareholders.’’

9.40am: On the ASX24, the SPI futures contract was 3 point higher to 4353. The slide in the Aussie dollar continued. The local unit was recently buying $US1.0324, about 1.25 US cents since late Wednesday, and down from yesterday's close of $US1.0355. It was also buying 83.81 yen, 80.86 euro cents and 65.16 pence.

What you need to know

The SPI was 3 points higher at 4353

The $A was trading at $US1.0324

In late trade, the S&P500 was down 0.12% to 1353.87

In Europe, the FTSE100 lost 0.77% to 5677.75

China iron ore added 40 US cents to $US122.80

Gold lost 0.9% to $US1713.80 an ounce

WTI crude oil lost $US1.33 to $US84.99 a barrel

RJ/CRB commodities index added 0.61% to 293.92

9.33am: Hi everyone. Welcome to the Markets Live blog for Thursday.

Contributors: Thomas Hunter, Richard Hughes, Jens Meyer, Max Mason

This blog is not intended as investment advice

BusinessDay with agencies

26 comments

Can the short sellers please go away....

Commenter

Not another day of falls

Location

Melbourne

Date and time

November 16, 2012, 10:01AM

Took a short on Monday. Will sell this arvo.I called the market lower than it is today, however still profit.

Commenter

Liberator

Location

SEQLD

Date and time

November 16, 2012, 12:28PM

I think you mean "buy" there, Liberator.

Commenter

panda

Location

Perth

Date and time

November 16, 2012, 2:22PM

@ Liberator

Don’t forget to donate 10% to the UIA.

I wonder if Israel short world equities before they launch a new offensive?

Commenter

Larry

Location

Larrytown

Date and time

November 16, 2012, 2:38PM

A new 14 year low for Harvey Norman. Myer can go on all it likes about a rebound in retail but it's all nonsense. Except for food, high street, high commercial rent, large scale bricks and mortar retail is on it's death bed, fatally wounded by by the internet. Getting the lowest prices online has become a national sport in electronics and now moving to hardware and clothing and footwear.

Commenter

Allan

Location

Prahran

Date and time

November 16, 2012, 10:43AM

Today's trade will be based on hopium. If you were to take a snapshot of the current world issues.........it makes you wonder.

I noticed Lynas is still in free fall.

Commenter

Linux

Date and time

November 16, 2012, 10:48AM

I guess with Lynas's share price at a whopping 21% under its mooted SPP price the SPP won't be getting off the ground. A really, really dumb plan to build their processing plant in Malaysia.

Commenter

Allan

Location

Prahran

Date and time

November 16, 2012, 10:49AM

But... but... the cheap wages!!! Yes that is it... the cheap wages!

Commenter

Liberator

Location

SEQLD

Date and time

November 16, 2012, 12:36PM

Oh dear 26% below last week's issue price.

Commenter

Allan

Location

Prahran

Date and time

November 16, 2012, 4:34PM

"The eurozone tipped back into recession for the second time in just three years in the third quarter, new data showed, making it even harder to solve the debt crisis eating away at the bloc's foundations."

The West including Australia will be going through a long period of asset price deflation. Think about what that means. Borrowing to pay inflated asset prices has meant that future profits/capital gains have been brought forward. This has been enabled by the trillions of dollars of credit that washed through the global system from the unregulated leverage resulting from the magic of credit default swaps and collateralised debt obligations.

In effect the entire global system bet on future gains that not only have not materialised but the bets themselves were so large and so greedy that the global financial system itself has been damaged to the point where growth for the next 5-10 years is all but impossible. While these global bets are unwinding and asset prices are deflating the ability to take on more serviceable debt is greatly impeded and without credit expansion there can be no economic expansion at rate high enough to absorb new entrants into the labour market and therefore unemployment will rise.

Anyone who thinks Australia and the gigantic Australian property bubble is somehow "different" or immune is delusional. Asset prices and wages are far too high in Australia especially if we want to position ourselves as part of Asia.